Here's a scenario I've seen frequently, including in my own practice:
An employee makes an employment standards complaint against an employer. The employer tries to handle the process itself, and eventually gets hammered with a significant "Order to Pay" and/or "Order for Compensation".
Then the employer applies for a "Review" of the Order - basically, an appeal to the Ontario Labour Relations Board.
But there are a couple of procedural pitfalls here: Namely, there's a strict timeline of 30 days in which to file the application for Review, and in order to file that application, you need to pay the amount of the Order to the Director of Employment Standards in trust. (Up to a point. Orders to Pay generally cap at $10,000 per employee, plus administrative costs; Orders for Compensation don't have that cap, but the 'payment in trust' nonetheless caps at $10,000. That being said, there are often multiple orders, or orders in respect of multiple employees. I have seen cases where employers were required to pay amounts well into the six digits in order to seek a Review.)
This is a fairly unique feature in legal proceedings. Indeed, in most circumstances, an appeal of an order includes (or can include) a stay of the order pending appeal. But the point here is this: If you're going to make the employee fight for his or her money, you're not going to be able to resist collection efforts afterwards.
And the problem is that, for many small or mid-size employers, paying a couple of sizable Orders to Pay creates financial hardship. This is where lawyers often see a file for the first time - where the employer is suddenly alerted to the fact that they're on the hook for more money than they can afford. (Of course, retaining the lawyer is often a challenge, in those circumstances. We aren't cheap. There's value, in a great many cases, but if you simply don't have the money...)
So employers, often acting on their own, have tried to find all sorts of creative ways to get an application for review in without having to get the funds together. Some tell the Board they can't pay the money, figuring that a fair system won't deny them their day in court just because they're broke. This doesn't work: The Board has been consistently clear that it has no jurisdiction to consider an application for review without payment of the requisite funds.
Some employers, thinking they're especially clever, make a "director's application" for review, because such an application doesn't require payment of money in trust...in fact, lots of employers try this, and I've had clients come to me saying, "Can't we do that instead?" But it doesn't work: A director's application is only available in circumstances where a director of the corporation has been ordered to pay the money personally, and it's a review only against the finding of personal liability against the director. It's not available if no Order has been made against the director personally, and even when such an order has been made the director's application doesn't attack the order against the employer itself.
I've occasionally theorized that a Judicial Review Application to the Divisional Court, against the Order to Pay, might be possible in a scenario where the employer is truly unable to pay the money into trust. It's a complicated argument, I'm not sure if it's ever been tried, and most importantly I'm not sure it would be useful. It's costly to go to court, and if the problem is that you can't pay the Order to Pay, quite often that's going to correlate to "I can't afford legal fees". Even if you did convince the Divisional Court to hear the merits of the application, you wouldn't get the same kind of review the OLRB would offer - the OLRB has a hearing de novo, meaning you call your evidence, the employee calls his evidence, and the OLRB makes its own decision, without regard to the decision of the Employment Standards officer. By contrast, on a Judicial Review Application, you would need to convince the court that the Employment Standards officer erred. Depending on the nature of the issues in dispute, it can be a much higher burden.
Timeliness is also an issue. While it isn't quite as bright-lined as the Board's position that it cannot consider an Application where payment has not been made, missing the 30-day deadline can be fatal. Consider the recent Premier Salons case, where the application itself, seeking to review Orders for an aggregate of over $50,000, was filed 4 days late (apparently because the U.S. HR department wasn't aware of the deadline), and the payment in trust wasn't made until months later due to 'counsel's inadvertence'. (Note: I don't know who their counsel was.) The Board found that neither explanation was compelling, and in any event the lateness of the payment in the face of directions from the Board showed a lack of effort to minimize delays. The Board refused to grant an extension of time, and dismissed the application for review as untimely. (The Courts tend to be a little more forgiving of "counsel's inadvertence" - in the absence of prejudice to the opposing party, technical defects are generally looked at fairly generously. The judge might tear a strip off of the lawyer, but won't lightly put the lawyer in a position to be sued by his client. At the OLRB...less so.)
In the appropriate case, an extension of time can be granted, but in many cases the Board says that it won't decide whether or not to exercise its discretion until the money is paid. In other words, once you've missed the deadline, the Board tells you, "If you don't pay the money, we won't hear the application...and if you do pay the money, we still might not hear the application."
What Should You Do?
The lesson to be drawn here is this: The sooner you get a lawyer involved, the better. A lawyer can assist you in dealing with the Employment Standards officer's investigation in the first place. That may help you avoid ending up in the position of having an Order to Pay made against you, such that you need to pony up the money to go to the OLRB.
But, even better, you can get a lawyer involved before a complaint is made, to help ensure ESA compliance and head off the likelihood of having to face substantial liabilities in that regard. A lot of small and mid-size employers make a lot of mistakes - fail to withhold and remit taxes, EI, and CPP; fail to provide statutory vacation pay; fail to keep appropriate vacation records; fail to provide statutory holiday pay; fail to comply with the overtime provisions of the ESA, fail to pay employees for all hours worked...
...these all add up to some fairly impressive liabilities when the stuff hits the fan. And it won't necessarily be just one employee, either: When one employee goes to the Ministry, the Ministry might well look into all of your payroll records.
In particular, there's a trend these days to call employees "independent contractors" and say "We don't have to worry about all that now." That is often completely wrong, and puts employers into a position of serious jeopardy.
If you're too small to hire an HR department and/or in-house counsel, there are HR consultants and external employment lawyers who are able to help you understand and comply with your obligations as an employer.
This blog is not intended to and does not provide legal advice to any person in respect of any particular legal issue, and does not create a solicitor-client relationship with any readers, but rather provides general legal information. If you have a legal issue or possible legal issue, contact a lawyer.